Career Advice Career Basics

Writing a Business Plan Cover Letter for Investors – Sample Format

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When submitting a business plan to an investor, it is vital to include a business plan cover letter that is addressed to the professional responsible for reviewing the business plan. This is the applicant’s chance to have a personal word with the lender and prepare him to read the business plan.

The feasibility of the business would be judged through the business plan. People who start small businesses spend lots of hours preparing their business plans, but they don’t put so much thought into the cover letter. This is a huge mistake, as the cover letter is an essential part of the plan.

Understand the Lender

If the applicant doesn’t know the name of the professional who will review the business plan, he should call the investor to get the name.

Even if the applicant has a personal relationship with the investor, a formal business plan must be submitted with a cover letter. If the applicant doesn’t know the lender, they shouldn’t forget that they would be judged by the contents and tone of the letter.

SEE ALSO: How to start a dry cleaning business (Best Guide)

The cover letter should be short, no more than one or no more than two pages. You must indicate upfront that a business plan is attached and that the applicant is applying for a business loan to start or develop a business.

It is important to clearly state the benefits to the investor. They must believe that there will be a good return on their investment or that the loan will be paid on time.

Some tips for the style of the letter are:

  • Use a formal and conversational tone
  • Don’t use jargon and abbreviations
  • Don’t make it too wordy
  • Provide a list of the focal points with an explanation of each
  • Use the active voice and short sentences.
  • Make the business look interesting, so they want to read the plan

The cover letter should also state explicitly why the business is better than it’s competitors. You can reference some marketing facts, focus group responses, demographics, or other key statistics from the business plan, but you shouldn’t overburden yourself with these facts.

Market research

You should have enough facts to present the business as viable and show that you’ve done your market research. The rest of the statistics should be in the plan. A concise mention of the financial situation should also be made without going into too much detail.

The letter should mention how much has already been invested in the business and what the projected earnings are for the next two years. This will show the lender or investor that the venture is worth it’s while. Below is our sample business plan cover letter. You should use it as a template to customize yours.

Sample business plan cover letter

Your Name
Your Address
Town, CA, 90002
July 10, 2021

Their Name
XYZ Leading Group
1200 Address Ave
Oakland, CA, 90009

Dear Mrs. Name,

I’m presenting my business plan to you in hopes of securing a $50,000 startup loan. I learned about your history of funding recycling centers and my proposal takes the business to the next level.

We have searched for other companies using recycled products or use waste material to recycle into their own products. According to our research, consumers are looking for companies that utilize green products.

I have a $10,000 personal finance that I’m planning to invest in the business. As stated in the plan, our goal is to make a profit of $4,000 in the first year and reinvest it in the business to expand our client base.

We would be the only company in the city offering this service, so we plan to be well established before our competitors enter the industry.

My brother, His Name, and I are working together to make this business successful. We have worked for the last six years at XYZ Recycle Group, where they fabricate plastic sheeting for construction companies from recycled plastic.

As outlined in the plan, I would collect the waste material and my brother will manage the accounts. We plan to employ the services of office help and trash pickups.

We have contacted many recycling centers in the city that has agreed to sell us their recyclable waste. We have located a warehouse available for rent as we move forward with the business.

Thank you for your time and consideration on this matter. I hope you evaluate my business plan. If you have further questions or would like to speak about the plan, you can contact me at 000-000-000 or [email protected]

I would be glad to meet you at any time that is convenient for you.

Sincerely,

Attached:
the Phil Mason’s exclusive business plan

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